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CHHB-Quarter 3 FY2002

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					Date: 29 November 2002

Attn: Cik Latifah Bt Haji Mohd Yusof
      Senior Vice President, Listing


                                    COUNTRY HEIGHTS HOLDINGS BERHAD (119416-K)
                                        QUARTERLY REPORT ANNOUNCEMENT

Quarterly report on consolidated results for the third quarter ended 30 September 2002.
The figures have not been audited.

CONDENSED CONSOLIDATED INCOME STATEMENT

                                                   INDIVIDUAL QUARTER                        CUMULATIVE QUARTER
                                                 CURRENT    PRECEDING YEAR                CURRENT     PRECEDING YEAR
                                                   YEAR     CORRESPONDING                  YEAR       CORRESPONDING
                                                 QUARTER        QUARTER                   TO DATE         PERIOD
                                                 30/9/2002      30/9/2001                 30/9/2002      30/9/2001

                                                  RM'000              RM'000               RM'000        RM'000

1(a)    Revenue                                    58,894            106,514               223,992       300,675

  (b)   Cost of sales                             (24,946)           (79,820)             (118,684)      (208,104)

  (c)   Gross profit                               33,948             26,694               105,308        92,571

  (d)   Other operating income                     1,211                87                  6,494         7,632

  (e)   Selling and distribution expenses          (2,416)            (3,389)             (10,620)        (9,115)

  (f)   Administrative expenses                    (3,359)            (3,422)              (8,251)        (9,980)

  (g)   Staff cost                                (11,462)           (10,334)             (33,486)       (30,776)

  (h)   Depreciation                               (6,752)            (7,217)             (20,104)       (21,562)

  (i)   Other operating expenses                   (7,562)            (8,207)             (19,213)       (20,470)

  (j)   Profit/ (loss) from operations             3,608              (5,788)              20,128         8,300

  (k)   Finance costs                             (16,388)            (7,752)             (47,455)       (21,893)

                                                  (12,780)           (13,540)             (27,327)       (13,593)

  (l)   Share of results of associated             (1,616)             (556)                (595)         (9,386)
        companies
                                                                                                               1
                                                   INDIVIDUAL QUARTER                  CUMULATIVE QUARTER
                                             CURRENT      PRECEDING YEAR            CURRENT     PRECEDING YEAR
                                               YEAR       CORRESPONDING              YEAR       CORRESPONDING
                                             QUARTER         QUARTER                TO DATE         PERIOD
                                             30/9/2002       30/9/2001              30/9/2002      30/9/2001

                                               RM'000             RM'000             RM'000               RM'000

(m)   Loss before taxation                     (14,396)          (14,096)            (27,922)             (22,979)

(n)   Taxation                                 (1,412)            (2,346)            (7,916)              (7,089)

(o)   Loss after taxation                      (15,808)          (16,442)            (35,838)             (30,068)

(p)   Minority interest                          715              (3,207)               783               (15,517)

(q)   Net loss for the period                  (15,093)          (19,649)            (35,055)             (45,585)


(r)   Basic earnings per ordinary share         (5.47)            (7.13)             (12.71)              (16.53)
      (sen)

(s)   Diluted earnings per ordinary share        NA                 NA                 NA                   NA
      (sen)


      (The Consolidated Income Statement should be read in conjunction with the Annual Financial Report
       for the year ended 31 December 2001)




                                                                                                                 2
COUNTRY HEIGHTS HOLDINGS BERHAD
QUARTER ENDED 30 SEPTEMBER 2002



CONDENSED CONSOLIDATED BALANCE SHEET
                                                  AS AT        AUDITED
                                                END OF       FINANCIAL
                                              CURRENT      STATEMENTS
                                              QUARTER      YEAR ENDED
                                             (unaudited)       (restated)
                                               30/9/2002      31/12/2001
                                                 RM'000           RM'000

1   Investment properties                       215,650          209,409
2   Property, plant and equipment               447,285          451,251
3   Real property assets                        117,729          133,215
4   Hotel properties and exhibition centre      899,128          898,840
5   Long term receivable                         39,047           33,952

6   Investment in associated companies          177,868          180,884

7   Other investments                             6,644            6,553

8   Goodwill on consolidation                        77               80

9   Current assets
      Inventories                                 4,093            4,773
      Development properties                     39,183          179,756
      Trade and other receivables               202,240          207,910
      Bank Balances held in trust                64,370               -
      Deposits, bank and cash balances           60,418           45,654
                                                370,304          438,093
10 Current liabilities
     Trade and other payables                   225,210          249,892
     Short term borrowings                      316,938          334,901
     Provision for taxation                      91,292           94,559
     Proposed dividend                            9,524           13,494
                                                642,964          692,846

11 Net current liabilities                     (272,660)        (254,753)

                                               1,630,768       1,659,431




                                                                            3
COUNTRY HEIGHTS HOLDINGS BERHAD
QUARTER ENDED 30 SEPTEMBER 2002



     CONDENSED CONSOLIDATED BALANCE SHEET
                                                                 AS AT               AUDITED
                                                               END OF              FINANCIAL
                                                             CURRENT              STATEMENT
                                                             QUARTER             YEAR ENDED
                                                            (unaudited)              (restated)
                                                              30/9/2002             31/12/2001
                                                                RM'000                  RM'000

     12 Share capital                                           275,699                275,699
        Reserves                                                491,488                528,706
        Shareholders’ equity                                    767,187                804,405

     13 Minority interests                                       11,287                  12,070

     14 Long term borrowings                                    708,431                708,826

     15 Other long term liabilities                             117,246                107,513

     16 Deferred taxation                                        26,617                  26,617

                                                              1,630,768               1,659,431



     17 Net tangible assets per share (RM) **                      2.78                    2.92


(The Consolidated Balance Sheet should be read in conjunction with the Annual Financial Report
 for the year ended 31 December 2001)




                                                                                             4
COUNTRY HEIGHTS HOLDINGS BERHAD
QUARTER ENDED 30 SEPTEMBER 2002


CONDENSED CONSOLIDATED CASH FLOW STATEMENT

                                                                         9 months
                                                                            ended
                                                                     30 September
                                                                             2002
                                                                          RM'000
Loss before taxation                                                      (27,922)
Adjustment for non-cash flow: -
Non-cash items                                                             19,679
Non-operating items (which are investing / financing)                      46,100
Operating profit before changes in working capital                         37,857

Changes in working capital
Net Change in current assets                                              145,019
Net Change in current liabilities                                         (42,725)

Interest paid                                                             (18,800)
Tax paid                                                                   (8,732)

Net cash flows generated from operating activities                        112,619

Investing Activities
Payment of stamp duties                                                   (13,228)
Increase in deposits pledged, sinking fund account and HDA account         (4,401)
Increase in bank balances held in trust                                   (64,370)
Proceeds from sale of property, plant & equipment                                46
Purchase of quoted shares                                                      (91)
Interest received                                                            1,355
Others                                                                       1,640
Net cash used in investing activities                                     (79,049)

Financing Activities
Dividend paid                                                              (3,970)
Net increase in bank borrowings                                                717
Net cash used in financing activities                                      (3,253)




                                                                                      5
COUNTRY HEIGHTS HOLDINGS BERHAD
QUARTER ENDED 30 SEPTEMBER 2002




CONDENSED CONSOLIDATED CASH FLOW STATEMENT (CONTINUE)

                                                                                 9 months ended
                                                                                   30 September
                                                                                            2002
                                                                                         RM'000
Net change in cash & cash equivalents                                                     30,317

Cash & cash equivalents at beginning of period                                             (13,202)

Cash & cash equivalents at end of period                                                    17,115



Cash & cash equivalents consist of:
- Deposit, bank and cash balances                                                            60,418
- Bank overdrafts                                                                          (35,229)
                                                                                             25,189
Less : Deposits pledged and placed pursuant to HDA regulations
      and sinking fund account                                                              (8,074)
                                                                                            17,115


Note: There are no comparative figures as this is the first interim financial report prepared in
accordance with MASB 26 ‘Interim Financial Reporting’.


(The Condensed Consolidated Cash Flow Statement should be read in conjunction with the
 Annual Financial Report for the year ended 31 December 2001).




                                                                                                      6
COUNTRY HEIGHTS HOLDINGS BERHAD
QUARTER ENDED 30 SEPTEMBER 2002




CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the nine months period ended 30 September 2002



                               Share Distributable         Non-distributable reserves      
                               Capital reserve
                              Ordinary Retained     Share  Reserve on Revaluation Exchange
                               shares   profits   premium consolidation   reserve      reserve                Total
                              RM' 000  RM' 000     RM' 000  RM' 000       RM' 000      RM' 000               RM' 000

9 months period ended
30 September 2002

Balance at 1 Jan 2002          275,699       99,225     57,232         59,788        319,042       (6,581)    804,405

Decrease/ movements
during the period
- Net loss for the period            -     (35,055)           -             -               -            -    (35,055)
- Translation loss                   -             -          -             -               -      (2,862)     (2,862)
- Crystallisation of profit          -             -          -           699               -            -         699
  Guarantee

Balance at 30 Sep 2002         275,699       64,170     57,232         60,487        319,042       (9,443)    767,187




Note: There are no comparative figures as this is the first interim financial report prepared in
accordance with MASB 26 – Interim Financial Reporting.


(The Condensed Consolidated Statement of Changes in Equity should be read in conjunction with
 the Annual Financial Report for the year ended 31 December 2001).




                                                                                                    7
COUNTRY HEIGHTS HOLDINGS BERHAD
EXPLANATORY NOTES FOR THE QUARTER ENDED 30 SEPTEMBER 2002
Part I : MASB 26 Requirements (Paragraph 16)


1   (a) Accounting Policies
       The quarterly report has been prepared in accordance with MASB 26 ‘Interim Financial
       Reporting’ and Chapter 9 part K of the Listing Requirements of Kuala Lumpur Stock
       Exchange. The same accounting policies and methods of computation are followed in the
       quarterly report as compared with the most recent annual audited financial statements of
       Country Heights Holdings Berhad (‘CHHB’) for the year ended 31 December 2001 with the
       exception of the adoption of MASB 24 ‘Financial Instruments: Disclosure and Presentation’
       (“MASB 24”) which is effective January 2002.


       Impact to financial statement
       With the implementation of MASB 24, Cumulative Redeemable Preference Shares
       (“CRPS”) issued by CHHB and a wholly owned subsidiary is now being regarded as
       financial liabilities. The consolidated balance sheet of CHHB as at 31 December 2001 has
       been restated whereby the CRPS and CRPS share premium were reclassified to long
       term financial liabilities from shareholders’ equity and minority interest respectively. CRPS
       dividend to be proposed/paid/accrued during the financial year ending 31 December 2002
       has been reflected as finance costs as opposed to an appropriation of reserves or minority
       interest. No restatement of income statement has been effected for the CRPS dividend
       proposed/paid/accrued during the prior financial years as MASB 24 does not require
       reclassifications for the interests/dividends (finance costs) for the period prior to the
       effective date of MASB 24 (i.e. before 1 January 2002).


    (b) Audit Opinion on 2001 Financial Statements
       The audit opinion on CHHB’s 2001 financial statements were not qualified by the auditors.


    (c) Seasonality or Cyclicality of Operations
       There is no seasonality or cyclicality of operations.


    (d) Exceptional/ Extraordinary items
       There were no exceptional/extraordinary items during the period under review.




                                                                                                 8
COUNTRY HEIGHTS HOLDINGS BERHAD
EXPLANATORY NOTES FOR THE QUARTER ENDED 30 SEPTEMBER 2002
Part I : MASB 26 Requirements (Paragraph 16)


1   (e) Change in Estimate
       There were no major changes in method of estimating during the period under review.


    (f) Issuance or Repayment of Debt and Equity Securities
       There is no issuance or repayment of debt or equity securities during the period under
       review.


    (g) Dividends paid
       Dividends paid by CHHB since the end of the previous financial year are as follows:

                                                                       RM’000

         - 5 sen net dividend on CRPS, paid on 25 October 2002              9,524

         - Final dividend of 2% (gross) less taxation at 28% on
           Ordinary Shares, paid on 13 September 2002                       3,970

                                                                        13,494


    (h) Segmental Information for the Current Financial Year to Date
       The revenue and results employed by the Group analysed by industry segments are as
       follows:

                                                                             Profit/ (loss)
                                                                                     before
                                                                  Revenue           taxation
                                                                   RM’000           RM’000
         Malaysian operations:
           Property development and construction                   96,867             7,310
           Hotel and leisure operations                            75,233           (13,527)
           Rental and related income                               37,797           (20,191)
           Others                                                   1,026            (1,246)

         Foreign operations:
           Property development and construction                   13,069              (268)
                                                                  223,992           (27,922)



                                                                                               9
COUNTRY HEIGHTS HOLDINGS BERHAD
EXPLANATORY NOTES FOR THE QUARTER ENDED 30 SEPTEMBER 2002
Part I : MASB 26 Requirements (Paragraph 16)


1   (i) Valuation of property, plant and equipment
       There were no new revaluation of property, plant & equipment during the period under
       review. Included in the balance sheet are the following assets which are carried at
       revalued amounts from revaluations made in previous years:


        At valuation                                            RM’000
        - Hotel properties and exhibition centre                899,128
        - Property, plant and equipment                          22,383
         Total                                                  921,511



    (j) Subsequent event
       There is no material event subsequent to 30 September 2002 that has not been reflected
       in the quarterly report for the period.


    (k) Changes in the Composition of the Group
       There were no changes in the composition of the Group during the financial period under
       review except for the acquisition of 100% equity interest in Mega Palm Sdn Bhd (“MPSB”)
       on 23 September 2002 for a cash consideration of RM1.00 from Avenue Assets Berhad
       (“AAB”).


       However, the financial statement of MPSB is not consolidated in accordance with MASB
       11 ‘Consolidated Financial Statements and Investments in Subsidiaries’ para 15(b) as
       MPSB is operating under severe restrictions which will significantly impair its ability to
       transfer funds to CHHB. The restriction is a result of MPSB still operating under
       receivership pending the issuance of the RM148.5 million Redeemable Convertible
       Secured Loan Stock (‘RCSLS’) by CHHB. Please refer to Note 2(h)(iii) for status of the
       proposed acquisition and settlement.


    (l) Contingent Liabilities / Assets
        There is no material contingent liabilities except as disclosed in note 2(k) (i) and no
        contingent assets except as disclosed in note 2 (k) (iii) as at the date of this quarterly
        report.


                                                                                              10
COUNTRY HEIGHTS HOLDINGS BERHAD
EXPLANATORY NOTES FOR THE QUARTER ENDED 30 SEPTEMBER 2002
Part II : KLSE Revised Requirements


2   (a) Review of To Date Performance (against previous year)
       The lower turnover is mainly due to lower turnover of approximately RM95.6 million
       recorded from the construction division as the infrastructure and office building contracts in
       Cyberjaya are nearing completion. The project is expected to be completed by end of
       financial year 2002. The decrease is partially offset by higher turnover achieved by the
       Cyber Heights Villa Project whereby substantial building work was completed in the
       current period and the units for Phase 1 and Phase 2 had been officially handed over for
       vacant possession recently. The tourism property division also recorded marginal
       improvement in performance as compared to the previous corresponding period.


       The Group recorded higher cumulative pre-tax loss of RM27.9 million in the current period
       as compared to RM22.9 million in the previous corresponding period. The increase in loss
       is mainly attributable to the reclassification of accrual of CRPS dividend of approximately
       RM19.6 million as finance cost as opposed to an appropriation of reserves or minority
       interest with the adoption of MASB 24 (as explained under note 1(a)).


       This is partially offset by lower share of losses of associated companies incurred in the
       current period as compared to the previous corresponding period. The share of losses of
       associated companies in the previous corresponding period included CHHB’s share of
       write off of operating expenses of RM5.2 million in the London International Exhibition
       Centre Holdings Limited in line with commencement of operations then.




                                                                                                 11
COUNTRY HEIGHTS HOLDINGS BERHAD
EXPLANATORY NOTES FOR THE QUARTER ENDED 30 SEPTEMBER 2002
Part II : KLSE Revised Requirements


2   (b) Material Changes in the Quarterly Results as Compared with the Immediate
       Preceding Quarter
       The Group recorded a higher pre-tax losses for the current quarter as compared to the
       preceding quarter. The decline in results was mainly contributed by lower profits
       recognized by our property development division particularly from the Cyber Heights Villa
       Project. Substantial building work was completed in quarter 2 of 2002 whereby units for
       Phase 1 and Phase 2 had been officially handed over for vacant possession.


    (c) Current Year Prospects
       Barring any unforeseen circumstances, the Group’s property development will record an
       improvement in results in the final quarter and for the year. This is in line with the
       commencement of recognition of results of Country Heights Damansara Project in MPSB’s
       accounts as we expect the RCSLS to be issued by December 2002. The Group is also
       currently actively sourcing for new development projects in an effort to increase its
       strategic land banks for future development.


       In anticipation of a gradual recovery of the Meeting, Incentive, Conference and Exhibition
       (‘MICE’) market, the Group’s tourism property division will embark on an aggressive
       marketing campaign in the coming months to attract tourists from new markets such as
       Middle East, West Asia, etc. With greater management efforts, promotions and innovative
       ideas, the performance of the tourism property division is also expected to improve in the
       coming months.


       In order to improve the company’s future performance, the management is actively looking
       into its two main components, namely staff performance and finance costs. With regard to
       staff performance, efforts will be made to improve productivity and increase future revenue
       in term of staff contribution. In relation to finance cost, the management is looking into
       securing cheaper interests rate loans, equity financing and disposal of assets to repay the
       debts.


    (d) Variance on Forecast Profit/ Profit Guarantee
       Not applicable.



                                                                                              12
COUNTRY HEIGHTS HOLDINGS BERHAD
EXPLANATORY NOTES FOR THE QUARTER ENDED 30 SEPTEMBER 2002
Part II : KLSE Revised Requirements


  (e) Taxation
      Taxation comprises:
                                                          Quarter 3               Cumulative Quarter
                                                      Current     Preceding        Current      Preceding
                                                   30/9/2002      30/9/2001      30/9/2002      30/9/2001
                                                     RM’000           RM’000       RM’000         RM’000
       Malaysian taxation - current period               527           1,388         5,495            5,909
       Share of taxation of        associated            885             958         2,421            1,180
       companies
                                                       1,412           2,346         7,916            7,089


      The effective rate of taxation for the Group is higher than the statutory tax rate as losses of
      certain subsidiary companies cannot be set off against profits made by other subsidiary
      companies.


   (f) Sale of Unquoted Investments/ Properties
      There were no sale of unquoted investments/ properties during the period under review.


   (g) Purchase and Sale of Quoted Securities
      (i) Total purchases of quoted shares during the financial period ended 30 September
          2002 amounted to RM91,800.


      (ii) Investments in quoted securities as at 30 September 2002 are as follows: -
                                                                                RM’000
          Total investments at cost                                               4,489

          Total investments at carrying value/ book value (after                  4,016
          provision for diminution in value)
          Total investment at market value at end of reporting                    1,138
          period


          No further provision for diminution is made to take into account the decline in value of
          investments in quoted securities as these investments are held for long term and the
          decline in value is deemed temporary.


                                                                                                 13
COUNTRY HEIGHTS HOLDINGS BERHAD
EXPLANATORY NOTES FOR THE QUARTER ENDED 30 SEPTEMBER 2002
Part II : KLSE Revised Requirements


   (h) Status of Corporate Proposals
      (i) Proposed Rights Issue, Special Issue and Bonus Issue of new ordinary shares in
        CHHB


        On 14 March 2002, the Company announced a new Proposed Rights Issue, Special
        Issue and Bonus Issue of new ordinary shares in CHHB. The Proposed Rights Issue of
        up to 401,176,000 new ordinary shares of RM1 each is on a basis of one Rights Issue
        share for every one existing ordinary share held, at an indicative issue price of RM1
        each. The Special Issue of 70,000,000 new ordinary shares of RM1 each at an
        indicative issue price of RM1 each will be made to Bumiputra investors approved by the
        Ministry of International Trade and Industry (‘MITI’). The proposed Bonus Issue shares
        will be issued as fully paid shares of RM1 each on the basis of one Bonus Issue share
        for every two Rights Issue shares and one Bonus Issue share for every two Special
        Issue shares. Subsequently, the Securities Commission approved the proposals except
        that for the issue of one Bonus Issue shares for every two Special Issue shares. The
        Company then proposed a revised Special Issue of 100,000,000 ordinary shares of RM1
        each at an indicative price of RM1 each, to be issued to Bumiputra investors to be
        approved by the MITI, in order to comply with the Foreign Investment Committee’s
        directive to the Company in relation to the Bumiputra equity participation.


        Based on the existing issued and fully paid-up share capital of 275,699,400 ordinary
        shares of RM1 each, the number of Rights Issue shares that will be issued will amount
        to 275,699,400 ordinary shares, and the Bonus Issue shares to be issued for these
        Rights Issue shares will amount to 137,849,700. Together with the revised proposed
        Special Issue of 100,000,000 ordinary shares, the total number of new shares to be
        issued pursuant to these proposals will amount to 513,549,100 and the number of
        ordinary shares in the issued and paid up share capital will be 789,248,500.


        All necessary approvals for the Proposed Rights Issue, Special Issue and Bonus Issue
        of new ordinary shares in CHHB have been obtained, including the approval from
        shareholders of the Company in an EGM held on 6 November 2002.




                                                                                          14
COUNTRY HEIGHTS HOLDINGS BERHAD
EXPLANATORY NOTES FOR THE QUARTER ENDED 30 SEPTEMBER 2002
Part II : KLSE Revised Requirements


   (h)    Status of Corporate Proposals (continue)
   (ii)   Proposed Public Offering Exercise To Be Undertaken by Mines City Hotel
          Sdn Bhd


          On 14 March 2002, the Company also announced a proposed divestment of up to 49%
          interest in Mines City Hotel Sdn Bhd (‘MCH’), a wholly owned subsidiary of CHHB. The
          proposed divestment will be by way of a proposed public issue/ placement of up to
          200,000,000 new MCH Shares at an indicative issue/ placement price of RM1.00 per
          MCH Share payable in full on application. MCH is the owner and operator of the Palace
          of the Golden Horses Hotel (‘PGH Hotel’). PGH Hotel is a five-star luxury hotel and
          conference centre situated within the Mines Resort City. The proceeds to be raised from
          this Proposed Public Offering will be mainly utilized by MCH to repay the
          RM250,000,000 nominal amount of 3% Redeemable Bonds 1996/2001 (‘Bonds’) and
          interests on the Bonds of which RM200,000,000 is outstanding, on behalf of CHHB, in
          order to secure the release of the charge on PGH Hotel. The proceeds from the
          issuance of the Bonds were earlier utilized primarily for the construction of PGH Hotel.


          The SC has approved the Proposed Public Offering under certain conditions, amongst
          which is the requirement that complete disclosure must be made in the prospectus, of
          recurring related party transactions and any potential conflict of interest in respect of the
          involvement of the company’s directors or major shareholders in businesses of similar
          trade as MCH.


          MITI and the Foreign Investment Committee have informed vide their letters that they
          have no objection to the Proposed Public Offering.


          An EGM of the Company and a meeting of Bondholders were held on 6 November 2002
          and approvals of the shareholders and Bondholders were obtained respectively, for the
          Proposed Public Offering.




                                                                                                   15
COUNTRY HEIGHTS HOLDINGS BERHAD
EXPLANATORY NOTES FOR THE QUARTER ENDED 30 SEPTEMBER 2002
Part II : KLSE Revised Requirements


 (h)     Status of Corporate Proposals (continue)
 (iii)   Proposed Acquisition of 100% stake in Mega Palm Sdn Bhd (in receivership) and
         Proposed Settlement by way of issue of RM148.5 million nominal value of
         Redeemable Cumulative Secured Loan Stocks (‘RCSLS’).


         As announced in September 2002, the acquisition of Mega Palm Sdn Bhd (in
         receivership) was completed on 23 September 2002. Mega Palm owns the lands in
         relation to the Country Heights Damansara project.


         The proposed settlement between Affin Merchant Bank Berhad (representing itself and
         other Term Loan Lenders), Mega Palm Sdn Bhd, Avenue Assets Berhad (‘AAB’) and
         CHHB in respect of the settlement of all claims of the Term Loan Lenders relating to
         Mega Palm Sdn Bhd’s RM220,000,000 Term Loan, is as follows:


         i)      issuance of RM148,500,000 0% to 8% Redeemable Convertible Secured Loan
                 Stock 2002/2007 (‘RCSLS’)
         ii)     deferred cash payment of RM25.75 million by the Company on the third
                 anniversary date from the issuance date of the RCSLS,
         iii)    cash payment of RM11.25 million by AAB,
         iv)     an issuance by AAB of RM14.5 million in nominal value of 5 year-zero coupon
                 Irredeemable Convertible Unsecured Loan Stocks (‘ICULS’).


         The cash payment of RM11.25 million has been made by AAB and AAB has also issued
         the ICULS. The issuance of RCSLS by CHHB is being finalised.


         The approval of the KLSE for the listing of and quotation for new CHHB shares to be
         issued arising from any conversion of the RCSLS has been obtained.


         Upon the completion of the proposed settlement, the Receivers and Managers of Mega
         Palm will be discharged.




                                                                                         16
COUNTRY HEIGHTS HOLDINGS BERHAD
EXPLANATORY NOTES FOR THE QUARTER ENDED 30 SEPTEMBER 2002
Part II : KLSE Revised Requirements


   (i)   Borrowings
         The Group borrowings and debt securities as at end of the reporting period are:

                                                              Short term     Long term         Total
          Secured                                               RM’000         RM’000        RM’000
           Bank overdrafts
           - local                                                 5,609              -       5,609

           Revolving credits
           - local                                              105,000               -     105,000

           Term loan
           - local                                                15,897        30,100       45,997
           - foreign (South African Rand)                              -         3,720        3,720

           Bonds                                                  50,000       150,000      200,000

           Cumulative Redeemable Preference Shares *                    -      333,436      333,436
           (‘CRPS’)

          Total secured borrowings                              176,506        517,256      693,762

          Unsecured
           Bank overdrafts
           - local                                                14,869              -      14,869
           - foreign (South African Rand)                         14,751              -      14,751

           Revolving credits
           - local                                              109,933               -     109,933

           Hire purchase & lease creditors                           879           697        1,576

           Cumulative Redeemable Preference Shares                      -      190,478      190,478

          Total unsecured borrowings                            140,432        191,175      331,607
          Comprising: -
          Total borrowings as at 30 September 2002              316,938        708,431     1,025,369
          Local borrowings                                      302,187        704,711     1,006,898
          Foreign borrowings                                     14,751          3,720        18,471

         * Represents the entire CRPS of a wholly owned subsidiary company, which is held by
           two financial institutions. CHHB has granted separate put options to the two financial
           institutions whereby these two financial institutions were given an unconditional and
           irrevocable right, and not an obligation, to sell the CRPS to CHHB. The options are
           secured over the Mines Shopping Fair and Mines Waterfront Business Park.


         All borrowings are denominated in Ringgit Malaysia unless indicated otherwise.


                                                                                              17
COUNTRY HEIGHTS HOLDINGS BERHAD
EXPLANATORY NOTES FOR THE QUARTER ENDED 30 SEPTEMBER 2002
Part II : KLSE Revised Requirements


 (j) Off Balance Sheet Financial Instruments
    There are no financial instruments with off balance sheet risk as at the date of this quarterly
    report.


 (k) Pending Material Litigation
    The pending material litigations are:
    (i) In July 2001, a third party filed a claim against Output Combination Sdn Bhd, a wholly
    owned subsidiary of CHHB, as the second defendant for wrongful termination of its
    appointment as exhibition managers. The alleged claims are for loss of management fee
    and commission amounting to RM300,000 and RM865,376 respectively plus other
    damages. The matter is pending hearing.


     (ii) Master Strike Sdn Bhd (‘Master Strike’), a wholly-owned subsidiary of CHHB, has in
    1998 commenced action against a third party for the refund of a deposit sum of
    RM7,140,985 (‘the Deposit) paid by Master Strike as purchaser pursuant to a Sale and
    Purchase Agreement which was forfeited on the ground of non-completion of the SPA by
    Master Strike. The Court dismissed Master Strike’s claim with costs in October 2001. Master
    Strike has filed in a Notice of Appeal and the hearing date for the appeal has not been fixed.


    (iii) Country Heights Sdn Bhd (‘CHSB’), a wholly-owned subsidiary of CHHB, has filed a
    claim against the Government for the compulsory acquisition of land at RM4,672,494. CHHB
    was awarded a sum of RM4,462,958. There is a current appeal by CHSB concerning an
    addition of 83 lots of land with a carrying value of approximately RM267,000, which have
    been affected as a result of the compulsory land acquisition. This appeal involves a total
    claim of RM1,523,373.The matter is now fixed for mention on 31 October 2002. The relevant
    State Legal Advisor has proposed a certain sum as settlement and we have counter
    proposed another figure. We are now awaiting reply from the State Legal Advisor.


    (iv) Mines City Hotel Sdn Bhd, a wholly-owned subsidiary of CHHB and some of CHHB’s
    subsidiaries commenced action in 2001 against a local council to dispute excessive
    assessments of RM7,400,000 imposed on the Plaintiffs. The Plaintiffs and Defendant are in
    the process of a settlement out of court and a notice of discontinuance has been filed in
    October 2002.

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COUNTRY HEIGHTS HOLDINGS BERHAD
EXPLANATORY NOTES FOR THE QUARTER ENDED 30 SEPTEMBER 2002
Part II : KLSE Revised Requirements


  (k) Pending Material Litigation (continue)
      (v) Affin Merchant Bank Berhad (‘AMBB’), the Plaintiff, acting as Facility Agent and Security
      Agent for Mega Palm Sdn Bhd’s (‘MPSB’) RM220,000,000 term loan facility lenders, namely
      AMBB and certain other lenders (‘TL Lenders’), has commenced proceedings before the
      High Court of Malaya at Kuala Lumpur against MPSB and Avenue Assets Berhad (‘AAB’) for
      the repayment of an amount of approximately RM232.2 million being the amount
      outstanding pursuant to a Facility Agreement dated 5 December 1996. The case was
      adjourned pending out of court settlement.


      AAB, AMBB (acting on instructions of the TL Lenders), MPSB and CHHB had on 14
      November 2000 and 31 December 2001 respectively entered into a Settlement Agreement
      and a Supplemental Settlement Agreement, where the parties thereto had agreed to settle
      this suit and the principal sum owed by MPSB to the TL Lenders together with interest
      accruing thereon and all other sums or money outstanding in full.


      The proposed settlement between AMBB, MPSB, AAB and CHHB is still pending, inter alia:
         the issue of the 0% to 8% Redeemable Convertible Secured Loan Stock (‘RCSLS’) by
          CHHB; and


         the registration of the two charges over land owned by MPSB.


(l)   Dividend
      Not applicable.




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COUNTRY HEIGHTS HOLDINGS BERHAD
EXPLANATORY NOTES FOR THE QUARTER ENDED 30 SEPTEMBER 2002
Part II : KLSE Revised Requirements


(m)   Earnings per share
      Basic earnings per share is calculating by dividing the loss after taxation and minority
      interest of RM35.1 million by the weighted average number of ordinary shares in issue of
      275,699,400 during the period under review.




By Order of the Board




Tan Sri Lee Kim Yew
Managing Director




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